Introduction to Trust Bank
The Trust bank is an organization which allows their customers to get into a contract and the contract is known as “Trust”. Here, in this case, the bank is the Trustee and the two other parties are involved known as settler and beneficiary. The Trust bank function according to the contract agreed upon. Many countries are opting for the Trust Bank services.
Explanation
It is usually formed to lower the burden of the estate taxes and the other tax benefits can be drawn. The trust bank services are a combination of banking services and investment related services. That means both commercial and individual client based work is done here. The main purpose of forming this type of bank is that the customers should get a wide range of services from them. Japan is leading to offer these services than any other countries. It works as a securities firm and thus helps the customers deal with the security related transactions. It works in a very unique manner. It involves three parties i.e. Beneficiary, Settler, and the Trustee. The work is done by entering into the contract with each other parties and thus the work of the trust bank is different and also to make it more effective the trust bank work has been separated from that of the Commercial banks.
Objectives of Trust Bank
- It provides security arrangement services to the individual as well as to the firms. It works in a unique manner to meet the requirements of the clients.
- It provides an offer to the clients to work on the investment related services which include asset management of the clients and their portfolios.
- The main objective of creating this type of trust banks is that if the services of the banks are distributed then the quality of each and every services are properly managed and thus the trust banks can easily manage the investment related matters of the clients thus provide them with the good and efficient decisions.
- It can create a clearer picture to the customers about their finances and can help them take wise decisions upon the same.
- The trust bankers can be very beneficial for the small investors also because the bank will inculcate the habit of saving and investing well and will make the customers learn how to play around with their monies in the financial market with the least risk.
History of Trust Bank
In the year 1905, Japan was the first country to introduce the concept of Trust Bank through a Secured Bonds Trust Act. The government passed the sanction to open the Trust bank which will manage all the investment-related issue of the clients those who are not very regular in finance market they will be given some knowledge so that they can take good financial decisions. By witnessing the great work the government in the year 1922 the government has approved its absolute functionality and thus the Trust Bank came into existence.
Functions of Trust Bank
- It provides very unique functions as compared to the regular work of any bank. The trust bank provides investment related decision services to the clients.
- The trust bank manages the client’s portfolios and provides them guidance.
- It helps the customers regarding asset management on their individual basis.
- It provides real estate related business advice to the customers.
- It also works as a securities trust for the clients as per their demands.
- It also works very efficiently for the stock transfer agencies and works to safeguard the interest of the customers on an individual basis as well.
- It also works in a customized manner thus is very helpful for the customers to manage their finances well.
- It also provides some services related to inheritance issues and gives the customer good guidance for their better future planning.
Trust Bank Account
A trust bank account is an account that is used to deal with the investment related issues of the clients and it requires an agreement to be made between the parties. The person will have to submit all the documents to the bank and here the bank after verifying all the submitted documents will make you a trustee. Now you will be allowed to perform your work without any hindrance.
Advantages
- It helps the individual customers as well as the group of firms to work out their investment-related matters.
- It provides guidance to the clients for their asset management and thus helps in their finance management.
- It can function only if the agreement is made and thus the chance of forgery is very less in this case.
- It helps the customers those who are new to this finance market as to how and when to invest in the securities to gain more profits.
- It helps the customers perform their ancillary services very well.
- It also provides with the disposal of the assets and thus works as a guide towards any type of situation related to finance of the clients.
Conclusion
The concept of Trust Bank was introduced by Japan but nowadays this technique is being used by most countries. The trust bank is an agreement based service that also works as an intermediary to the customers. The services are generally customized as per the requirements of the customers and thus it is very helpful. The trust bank will inculcate the habit of saving especially for the small investors with small budgets this can be a boon. It can manage the assets of the clients also help them in their decisions regarding the inheritances of the property. It is a very nice concept and should be given equal emphasis as compared to the basic bank services.
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